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Pakistan’s growth rate at 0.5pc in FY21

Norwegian

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World Bank forecasts Pakistan’s growth rate at 0.5pc in FY21
By Ghulam Abbas

–Containment measures, impact of pre-pandemic monetary and fiscal tightening cited as key reasons for restrained growth in Pakistan
–Global economic prospects report stresses collective measures for robust, sustainable and equitable growth

ISLAMABAD: Taking stock of the dwindling economic situation due to the coronavirus pandemic, the World Bank has forecast Pakistan’s growth rate at 0.5 per cent financial year 2020-21.
In its report titled “2021 Global Economic Prospects”, the World Bank has estimated that Pakistan’s growth rate contracted by 1.5 per cent during the last financial year due to the effects of measures taken by the government to curb the spread of coronavirus, as well as the impact of monetary and fiscal tightening prior to the pandemic.
The report states that the real interest rates were moved into the negative territory because of reduction in policy rate – 250 BPS on average and 625 BPS in Pakistan.
Acknowledging the steps taken to ensure the usage of formal channels for transferring remittances, the report states that inflow remained robust in 2020 with Pakistan and Bangladesh experiencing double-digit growth in this sector due to the usage of said channels, government incentives and the return of migrant workers.
The World Bank said that Pakistan, India and Bangladesh’s current accounts were positively affected by the inflows during the said period, besides international assistance, which helped several regional economies increase their foreign reserves.
As for economic recovery, the report states that Pakistan is expected to experience as restrained growth – averaging 1.3 per cent over the next two years – which is slightly better than previously expected, but far below the growth potential. Continued fiscal consolidation pressures and the weaknesses of the services sector are among the factors that could subdue Pakistan’s economic growth. Explaining its projection, the World Bank states that the outlook is predicted on Pakistan maintaining reform momentum, and its adherence to a macroeconomic-sustainability framework.
The report also cautions against limited prospects for a strong rebound in the services sector, which would result in aggravating poverty in the country, given that the sector represents half of Pakistan’s output and is an important financial source for low-income households.
Talking about the regional situation, the report, while excluding India, states that economic growth would slow to 0.9 per cent in 2021, with Pakistan, Afghanistan and Maldives taking the largest hit.
Regarding the risk of debt distress, the World Bank states that several economies, including Pakistan, Sri Lanka and Maldives, are at high risk, and require decisive action to maintain macroeconomic stability. It also cautions against security-related uncertainties Pakistan, India, Afghanistan and Nepal, given how they could adversely affect the fragile economic situation.
The report goes on to project a broader picture of the global economy, stating that economic growth is projected to be subdued, with the global economic output expected to expand by 4 per cent. It also cites the risk of setbacks in containing the pandemic as a potential factor which could derail economic recovery. It projects growth in emerging markets and developing economies at 5 per cent, while stating that the output of these countries is expected to remain well below their pre-pandemic situation.
Regarding global debt, the World Bank states that the pandemic exacerbated the risk associated with the decade-long wave of debt accumulation, with debt levels reaching historic highs, thus making the global economy vulnerable to market stress.
Furthermore, the report projects that the pandemic is likely to be cause of realisation of long-expected slowdown in economic growth during the decade ahead of us. It stresses the role of policymakers in improving the likelihood of better growth outcomes, limiting the spread of the virus, providing relief to vulnerable segments in populations, and overcoming vaccine-related challenges.
Finally, the World Bank also highlights that weak fiscal positions are severely constraining support measures of governments in many countries, and emphasises the need for reforms to ensure robust, sustainable and equitable growth, while stressing that global cooperation is the key to addressing many of these challenges. It adds that the global community needs to act rapidly and forcefully to ensure that the ongoing debt wave does not lead to a string of debt crises in emerging markets and developing economies as was the case previously.

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muhammadhafeezmalik

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The economy is moving in the right direction.

According to the World Bank, the government will be able to achieve economic growth of only 25% of its target. According to the World Bank, Pakistan's economy will grow by 0.5% this year, but the government has set a growth target of 2.1%.
 

Patriot forever

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Pakistan will easily achieve its target of 1.5% to 2.0% growth this year July 20-July2021. This World Bank report is from the beginning of 2020 to its end estimated at 0.5%. All of our key indicators are positive be it LSM, Textile, agriculture etc.

"The recent developments in the industrial and agriculture sectors have given a ray of hope that the economic growth rate may remain in the range of 2.6% to 2.8% in this fiscal year - better than the official target of 2.1%".

 
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Indos

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The economy is moving in the right direction.

According to the World Bank, the government will be able to achieve economic growth of only 25% of its target. According to the World Bank, Pakistan's economy will grow by 0.5% this year, but the government has set a growth target of 2.1%.
0.5 % is the growth for 2020 period (last year). Actually some report/economic news can create a bit confused for people living in countries such as Pakistan/India/Bangladesh that use middle of year as beginning of fiscal year. Honestly South Asian way of setting fiscal year makes things get complicated.
 

Patriot forever

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0.5 % is the growth for 2020 period (last year). Actually some report/economic news can create a bit confused for people living in countries such as Pakistan/India/Bangladesh that use middle of year as beginning of fiscal year. Honestly South Asian way of setting fiscal year makes things get complicated.
Yes you are correct. This is form the beginning of 2020 to its end. In Pakistan it is done from July to July.

It is easier to understand from this article.

" India, the pandemic hit the economy at a time when growth was already decelerating. The output is estimated to contract by 9.6 per cent in Fiscal Year 2020/21, reflecting a sharp drop in household spending and private investment," it said.
"In India, growth is expected to recover to 5.4 per cent in 2021, as the rebound from a low base is offset by muted private investment growth given financial sector weaknesses," the bank said.

The informal sector, which accounts for four-fifths of employment, has also been subject to severe income losses during the pandemic. Recent high-frequency data indicate that the services and manufacturing recovery are gaining momentum, the report said.
"In the financial sector, non-performing loans were already high before the pandemic," it said.
In Pakistan, the recovery is expected to be subdued, with growth at 0.5 per cent in fiscal 2020/21. Growth is projected to be held back by continued fiscal consolidation pressures and service sector weakness," it said."


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Death Adder

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From 5.8% to -2 and now it’s 0.5 and everyone is saying PTI have done this and that. PTI progress will only start when they cross 5.8% GDP growth rate benchmark.
 

Syed1.

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All indicators pointing towards 3-4% growth in FY21 and this is organic, sustainable growth fueled by industry as can be seen in LSM numbers and export receipts. Not patwari league fake 5% growth on the basis of consumption and imports meanwhile local industry was shutting down.


Achieving 3-4% growth while all our major export destinations are still in lockdown is amazing news. Inshallah we will surpass 5% in FY22. Just today stock exchange crossed 45,000 mark. This is higher than what PTI received from patwari league in 2018.



Don't give undue attention to the khota khors on this thread. In a way it makes sense why Dar raped the economy to show fake growth rate. He knew his paindu fan base is so mentally challenged and unparh that the only figure they know is growth. So if he can fake and fudge his way to an impressive growth number while everything else is on fire in the economy then the paindus will lap it and accept him as their abu.
 

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